<PAGE>
- --------------------------------------------------------------------------------
1996
ANNUAL REPORT
October 31, 1996
Waterhouse
Investors Cash
Management
Fund, Inc.
................
Three portfolios to choose from:
Money Market o U.S. Government o Municipal
[WATERHOUSE INVESTOR SERVICES LOGO]
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<PAGE>
2
----------------------------
TABLE OF CONTENTS
----------------------------
Letter to Shareholders........................................................ 3
Statements of Assets and Liabilities.......................................... 4
Statements of Operations...................................................... 5
Statements of Changes in Net Assets........................................... 6
Financial Highlights.......................................................... 7
Notes to Financial Statements................................................. 8
Money Market Portfolio
Schedule of Investments....................................................11
U.S. Government Portfolio
Schedule of Investments....................................................14
Municipal Portfolio
Schedule of Investments....................................................16
Notes to
Schedules of Investments...................................................21
Report of Ernst & Young LLP, Independent Auditors.............................22
Board of Directors and
Executive Officers.........................................................23
Service Providers.............................................................24
<PAGE>
3
Dear Shareholder:
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I am pleased to provide you with the Waterhouse Investors Cash Management Fund
annual report for the fiscal year ended October 31, 1996.
During the period, each of the Fund's Portfolios - Money Market, U.S. Government
and Municipal - recorded solid performance and achieved its objective. The Fund
has attempted to provide maximum current income from high quality money market
securities while maintaining conservative portfolios to insure safety of
principal. During the period, Fund assets increased to a total of $1.9 billion.
Portfolio Results*
For the fiscal year October 31, 1996, the Fund's three Portfolios had the
following annualized returns.**
o The Money Market Portfolio had an annualized return of 4.82%.
o The U.S. Government Portfolio had an annualized return of
4.82%.
o The Municipal Portfolio had an annualized return of 3.05% and a
tax equivalent return of 4.77%.(1)
We believe that modest economic growth and low inflation continue to provide a
favorable environment for the financial markets. Growth in Gross Domestic
Product has slowed to a manageable 2% to 2.5% level, which has helped to keep
inflation in check. In addition, the unemployment rate remains low and steady.
All of these factors have led the Federal Reserve to leave short-term interest
rates relatively unchanged for most of 1996. Given the current political
environment, as voters reelected a Republican Congress and a Democratic
Administration, we believe the combination of political and economic stability
should bode well for our shareholders, providing an attractive yield in a low
inflation environment.
In conjunction with the Waterhouse Investors Money Management Account - the
asset management account rated #1 by Kiplinger's Personal Finance Magazine(2) -
you receive the added value and convenience of free checking and ATM access. In
addition, we have recently introduced our newest cash management services -
Direct Deposit/Money Transfer Plans. You can now deposit your salary or social
security payments directly to your account or authorize us to systematically
transfer money to your brokerage account. If you have not already set-up such an
account or service and wish to do so, please call Customer Service at
1-800-934-4410.
Thank you for investing in the Fund and for your confidence in Waterhouse. We
look forward to continuing to meet your expanding investment needs in the years
to come.
Sincerely,
/s/ Lawrence M. Waterhouse, Jr.
Lawrence M. Waterhouse, Jr.
Chairman and Chief Executive Officer
Waterhouse Investor Services, Inc.
* The Waterhouse Investors Cash Management Fund is neither FDIC-insured nor
guaranteed by the U.S. Government and is not a deposit or obligation of, or
guaranteed by, any bank. There can be no assurance that a Portfolio will be able
to maintain a stable net asset value of $1 per share.
** These returns are based on a constant investment throughout the period,
include reinvestment of dividends and reflect a net return to the shareholder
after all expenses, inclusive of fee waivers. For the fiscal year ended October
31, 1996, the Investment Manager and its affiliates waived a portion of their
fee, for the Money Market, U.S. Government and Municipal Portfolios. Without
these fee waivers in effect, the annualized returns would have been 4.69%, 4.64%
and 2.82%, respectively. The annualized tax equivalent return for the Municipal
Portfolio would have been 4.41%.
(1) Taxable equivalent yield at 36% marginal federal income tax rate.
(2) This rating is based on fees, money market and margin-loan interest rates,
and other services.
<PAGE>
4
WATERHOUSE INVESTORS CASH MANAGEMENT FUND, INC.
STATEMENTS OF ASSETS AND LIABILITIES
October 31, 1996
<TABLE>
<CAPTION>
Money Market U.S. Government Municipal
Portfolio Portfolio Portfolio
<S> <C> <C> <C>
ASSETS
Investments in securities, at value (including
repurchase agreements of $38,620,000,
$44,979,000, and $0, respectively) (Note 2) $ 1,337,591,981 $ 370,434,312 $ 225,449,734
Cash 1,139 1,492 35,220
Deferred organization costs (Note 1) 383,600 98,640 65,760
Interest receivable 9,108,815 1,707,247 1,333,208
--------------- ------------- -------------
Total Assets 1,347,085,535 372,241,691 226,883,922
LIABILITIES
Dividends payable to shareholders 2,745,601 745,363 289,011
Payable for securities purchased --- --- 75,531
Payable to Investment Manager and
its affiliates (Note 3) 975,464 229,692 124,928
Accrued expenses and other liabilities 754,384 219,866 141,058
--------------- ------------- -------------
Total Liabilities 4,475,449 1,194,921 630,528
--------------- ------------- -------------
NET ASSETS $ 1,342,610,086 $ 371,046,770 $ 226,253,394
=============== ============= =============
Net assets consist of:
Paid-in capital $ 1,342,610,881 $ 371,046,981 $ 226,254,165
Accumulated net realized losses
from security transactions (795) (211) (771)
--------------- ------------- -------------
Net assets, at value $ 1,342,610,086 $ 371,046,770 $ 226,253,394
=============== ============= =============
Shares outstanding ($.0001 par value common
stock, 60 billion, 20 billion, and
20 billion shares authorized, respectively) 1,342,610,881 371,046,981 226,254,165
=============== ============= =============
Net asset value, redemption price and offering
price per share (Note 2) $ 1.00 $ 1.00 $ 1.00
=============== ============= =============
</TABLE>
Please see accompanying notes to financial statements.
<PAGE>
5
WATERHOUSE INVESTORS CASH MANAGEMENT FUND, INC.
STATEMENTS OF OPERATIONS
For the Period Ended October 31, 1996*
<TABLE>
<CAPTION>
Money Market U.S. Government Municipal
Portfolio Portfolio Portfolio
<S> <C> <C> <C>
INVESTMENT INCOME
Interest income $ 51,980,895 $ 13,666,433 $ 6,000,283
--------------- ------------- -------------
EXPENSES
Investment management fees 3,339,325 890,354 595,954
Administration fees 956,680 254,387 170,273
Transfer agent fees 1,913,360 508,773 340,545
Shareholder servicing fees 1,913,360 432,457 187,300
Shareholder reports and mailing 230,326 46,065 30,710
Registration fees 278,721 87,070 66,244
Professional fees 94,194 18,839 12,559
Custody fees 67,886 30,995 19,338
Directors' fees 20,444 20,179 20,156
Other expenses 26,907 23,407 7,429
--------------- ------------- -------------
TOTAL EXPENSES 8,841,203 2,312,526 1,450,508
Fees waived / expenses reimbursed by the
Investment Manager and its affiliates (Note 3) (1,290,107) (448,731) (385,771)
--------------- ------------- -------------
NET EXPENSES 7,551,096 1,863,795 1,064,737
--------------- ------------- -------------
NET INVESTMENT INCOME 44,429,799 11,802,638 4,935,546
--------------- ------------- -------------
NET REALIZED LOSS FROM SECURITY
TRANSACTIONS (795) (211) (771)
--------------- ------------- -------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 44,429,004 $ 11,802,427 $ 4,934,775
=============== ============= =============
</TABLE>
* The Fund commenced operations on December 20, 1995.
Please see accompanying notes to financial statements.
<PAGE>
6
WATERHOUSE INVESTORS CASH MANAGEMENT FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
For the Period Ended October 31, 1996*
<TABLE>
<CAPTION>
Money Market U.S. Government Municipal
Portfolio Portfolio Portfolio
<S> <C> <C> <C>
OPERATIONS
Net investment income $ 44,429,799 $ 11,802,638 $ 4,935,546
Net realized loss from security transactions (795) (211) (771)
--------------- -------------- -------------
Net increase in net assets from operations 44,429,004 11,802,427 4,934,775
--------------- -------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM NET INVESTMENT INCOME (44,429,799) (11,802,638) (4,935,546)
--------------- -------------- -------------
CAPITAL SHARE TRANSACTIONS
($1.00 per share)
Proceeds from shares sold 4,317,083,085 1,126,273,406 711,316,179
Shares issued in reinvestment of dividends 41,684,198 11,057,275 4,646,535
Payments for shares redeemed (3,016,216,402) (766,303,700) (489,728,549)
--------------- -------------- -------------
Net increase in net assets from
capital share transactions 1,342,550,881 371,026,981 226,234,165
--------------- ------------- -------------
TOTAL INCREASE IN NET ASSETS 1,342,550,086 371,026,770 226,233,394
NET ASSETS
Beginning of period 60,000 20,000 20,000
--------------- ------------- -------------
End of period $ 1,342,610,086 $ 371,046,770 $ 226,253,394
=============== ============= =============
</TABLE>
* The Fund commenced operations on December 20, 1995.
Please see accompanying notes to financial statements.
<PAGE>
7
WATERHOUSE INVESTORS CASH MANAGEMENT FUND, INC.
FINANCIAL HIGHLIGHTS
For the Period Ended October 31, 1996*
Contained below is per share operating performance data for a share of common
stock outstanding, total investment return, ratios to average net assets and
other supplemental data for the period indicated. This information has been
derived from each Portfolio's financial statements.
<TABLE>
<CAPTION>
Money Market U.S. Government Municipal
Portfolio Portfolio Portfolio
<S> <C> <C> <C>
Per Share Operating Performance
Net asset value, beginning of period $1.000 $1.000 $1.000
--------------- -------------- -------------
Net investment income 0.041 0.041 0.026
--------------- -------------- -------------
Distributions from net investment income (0.041) (0.041) (0.026)
--------------- -------------- -------------
Net asset value, end of period $1.000 $1.000 $1.000
=============== ============== =============
Ratios
Ratio of net expenses to average net assets** 0.79% (A) 0.73% (A) 0.62% (A)
Ratio of net investment income to average
net assets** 4.64% (A) 4.64% (A) 2.90% (A)
Decrease reflected in above net expense ratio
due to waivers / reimbursements by the
Investment Manager and its affiliates (Note 3) 0.13% (A) 0.18% (A) 0.23% (A)
Supplemental Data
Total investment return (B) 4.82% (A) 4.82% (A) 3.05% (A)
Net assets, end of period $ 1,342,610,086 $ 371,046,770 $ 226,253,394
=============== ============== =============
</TABLE>
* The Fund commenced operations on December 20, 1995.
** The average net assets for the period were $1,104,558,438, $293,708,330
and $196,592,413 for the Money Market Portfolio, U.S. Government Portfolio
and Municipal Portfolio, respectively.
(A) Annualized.
(B) Total investment return is calculated assuming a purchase of shares on the
first day and a sale on the last day of the period reported and includes
reinvestment of dividends.
Please see accompanying notes to financial statements.
<PAGE>
8
WATERHOUSE INVESTORS CASH MANAGEMENT FUND, INC.
Notes to Financial Statements - October 31, 1996
NOTE 1 - ORGANIZATION
Waterhouse Investors Cash Management Fund, Inc. (the "Fund") was organized as a
Maryland corporation on August 16, 1995. The Fund is registered as an open-end,
diversified management investment company with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended (the "Act") and
the Securities Act of 1933. The investment objective of the Money Market
Portfolio, the U.S. Government Portfolio and the Municipal Portfolio is to seek
maximum current income to the extent consistent with liquidity and preservation
of capital. The Money Market Portfolio has the flexibility to invest broadly in
U.S. dollar-denominated securities of domestic and foreign issuers. The U.S.
Government Portfolio offers an added measure of safety and invests exclusively
in obligations issued or guaranteed by the U.S. government, its agencies or
instrumentalities. The Municipal Portfolio offers investors federally tax-exempt
income by investing primarily in municipal securities. The Fund had no
operations until December 20, 1995 (when operations commenced for all
Portfolios) other than matters relating to its organization and the sale and
issuance of 60,000 shares of the Money Market Portfolio and 20,000 shares each
of the U.S. Government Portfolio and the Municipal Portfolio ("Initial Shares")
to FDI Distribution Services, Inc.
Waterhouse Securities, Inc. ("Waterhouse Securities") absorbed all
organizational expenses other than securities registration fees. These fees have
been deferred and will be amortized from the date operations commenced, December
20, 1995, over a period which it is expected that a benefit will be realized,
not to exceed five years. If any of the Initial Shares are redeemed during the
amortization period by any holder thereof, the redemption proceeds will be
reduced by any unamortized organizational costs of that Portfolio in the same
proportion as the number of Initial Shares being redeemed bears to the number of
Initial Shares outstanding of that Portfolio at the time of redemption.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the Fund's significant accounting policies:
Computation of Net Asset Value - It is the Fund's policy to maintain a
continuous net asset value of $1.00 per share for each Portfolio. The Fund has
adopted certain investment, portfolio valuation and dividend and distribution
policies to enable it to do so. There is no assurance, however, that each
Portfolio will be able to maintain a stable net asset value of $1.00 per share.
Securities Valuation - The Fund's securities are valued on the amortized cost
basis, which approximates market value. This involves initially valuing a
security at its original cost and thereafter assuming a constant amortization to
maturity of any discount or premium.
Repurchase Agreements - The Fund may enter into repurchase agreements with
financial institutions, deemed to be creditworthy by the Fund's Investment
Manager, subject to the seller's agreement to repurchase and the Fund's
agreement to resell such securities at a mutually agreed upon price. Securities
purchased subject to repurchase agreements are deposited with the Fund's
custodian and, pursuant to the terms of the repurchase agreement, must have an
aggregate market value greater than or equal to the repurchase price plus
accrued interest at all times. If the value of the underlying securities falls
below the value of the repurchase price plus accrued interest, the Fund will
require the seller to deposit additional collateral by the next business day. If
the request for additional collateral is not met, or the seller defaults on its
repurchase obligation, the Fund maintains the right to sell the underlying
securities at market value and may claim any resulting loss against the seller.
Investment Income - Interest income is accrued as earned. Discounts and premiums
on securities purchased are amortized in accordance with income tax regulations
which approximate generally accepted accounting principles.
Distributions to Shareholders - Dividends arising from net investment income are
declared daily and paid monthly. With respect to
<PAGE>
9
each Portfolio, net realized short-term capital gains, if any, may be
distributed during the year and net realized long-term capital gains, if
any, are distributed at least once each year. Income distributions and
capital gain distributions are determined in accordance with income tax
regulations.
Securities Transactions - Securities transactions are accounted for on the trade
date. Realized gain and loss from securities transactions are recorded on a
specific identification basis.
Expenses - Expenses directly attributable to each Portfolio are charged to that
Portfolio's operations. Expenses which are applicable to all Portfolios are
allocated on a pro rata basis.
Use of Estimates - The Fund's financial statements are prepared in accordance
with generally accepted accounting principles, which may require the use of
management estimates and assumptions. Actual results could differ from these
estimates.
Federal Income Taxes - It is each Portfolio's policy to comply with the special
provisions of the Internal Revenue Code available to regulated investment
companies. As provided therein, in any fiscal year in which a Portfolio so
qualifies, and distributes at least 90% of its taxable net income, the Portfolio
(but not the shareholders) will be relieved of federal income tax on the income
distributed. Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also each Portfolio's intention to declare as
dividends in each calendar year at least 98% of its net investment income
(earned during the calendar year) and 98% of its net realized capital gains
(earned during the twelve months ended October 31) plus undistributed amounts
from prior years.
NOTE 3 - INVESTMENT MANAGEMENT FEES AND OTHER TRANSACTIONS WITH
AFFILIATES OF THE INVESTMENT MANAGER
Under the terms of an Investment Management Agreement with Waterhouse Asset
Management, Inc. (the "Investment Manager"), an indirect wholly owned subsidiary
of The Toronto-Dominion Bank, for the investment management services furnished
to each Portfolio, such Portfolio pays the Investment Manager a monthly
investment management fee at an annual rate, on a graduated basis, equal to .35
of 1% of the first $1 billion of average daily net assets of each such
Portfolio, .34 of 1% of the next $1 billion, and .33 of 1% of average daily net
assets of each such Portfolio over $2 billion. The Investment Manager has agreed
to waive a portion of its fee payable by the Municipal Portfolio through October
15, 1998, so that the actual fee payable annually by such Portfolio during such
period will be equal to .25 of 1% of its average daily net assets. For the
period ended October 31, 1996, the Investment Manager voluntarily waived $8,425,
$828 and $171,894 of its investment management fee for the Money Market
Portfolio, the U.S. Government Portfolio and the Municipal Portfolio,
respectively.
The Investment Manager has also been retained under an Administration Agreement
to perform certain administrative services for the Fund. For the administrative
services rendered to the Fund, each Portfolio pays the Investment Manager a
monthly fee at an annual rate of .10 of 1% of each Portfolio's average net
assets. For the period ended October 31, 1996, the Investment Manager
voluntarily waived or reimbursed $308, $1,730 and $14,089 of its administration
fee for the Money Market Portfolio, the U.S. Government Portfolio and the
Municipal Portfolio, respectively.
Waterhouse Securities, an affiliate of the Investment Manager, has been
retained under a Shareholder Services Agreement to perform shareholder
servicing necessary for the operation of the Fund. The shareholder
service plan adopted by the Fund provides that each Portfolio pays
Waterhouse Securities a monthly fee at an annual rate of up to .25 of 1%
of average daily net assets. The Fund's Board has determined to limit
the annual fee payable through October 15, 1998 under the Shareholder
Servicing Plan so as not to exceed .20 of 1% of average daily net assets
in the case of the Money Market Portfolio, .17 of 1% of average daily
net assets in the case of the U.S. Government Portfolio and .11 of 1% of
average daily net assets in the case of the Municipal Portfolio. For the
period ended October 31, 1996, Waterhouse Securities voluntarily waived
$1,129,420, $320,311 and $105,267 of its shareholder servicing fee for
the Money Market Portfolio, the U.S. Government Portfolio and the
Municipal Portfolio, respectively.
<PAGE>
10
The Fund has entered into a Transfer Agency and Dividend Disbursing Agency
Agreement with Waterhouse National Bank (the "Bank"), an affiliate of the
Investment Manager, to perform transfer and dividend disbursing agency-related
services. For such services each Portfolio pays the Bank a monthly fee at an
annual rate of .20 of 1% of average daily net assets. For the period ended
October 31, 1996, the Bank voluntarily waived $151,954, $125,862 and $94,522 of
its transfer agent fee for the Money Market Portfolio, the U.S. Government
Portfolio and the Municipal Portfolio, respectively.
Each Director who is not an "affiliated person" as defined in the Act receives
from the Fund $3,000 per quarter and $2,000 for each meeting attended.
NOTE 4 - SHAREHOLDER MEETING (UNAUDITED)
On April 10, 1996, Waterhouse Investor Services, Inc. ("Waterhouse") and The
Toronto-Dominion Bank ("TD Bank") announced that they had signed a merger
agreement, providing for TD Bank to acquire Waterhouse through a merger of
Waterhouse into a newly formed subsidiary of TD Bank (the "Merger").
The Merger between Waterhouse and TD Bank was consummated on October 15, 1996,
resulting in the indirect change of control of a parent company of the
Investment Manager and the termination of the Investment Management Agreement
between the Investment Manager and the Fund. A new Investment Management
Agreement, containing substantially identical terms to the existing agreement,
becoming effective upon the closing of the Merger, was approved by the Fund's
Board of Directors on June 12, 1996.
At a Special Meeting of Shareholders on August 28, 1996, shareholders of each of
the Money Market Portfolio, the U.S. Government Portfolio and the Municipal
Portfolio were asked to approve the new Investment Management Agreement. A
summary of the resulting votes are presented below.
<TABLE>
<CAPTION>
PORTFOLIO FOR* AGAINST* ABSTAIN* TOTAL*
--------- ---- -------- -------- ------
<S> <C> <C> <C> <C>
Money Market Portfolio 1,116,414,149 46,462,930 37,710,082 1,200,587,161
U.S. Government Portfolio 299,310,814 10,010,039 12,462,520 321,783,373
Municipal Portfolio 197,564,382 8,938,147 8,032,305 214,534,834
</TABLE>
*This includes shares which Waterhouse Securities held in nominee name and with
respect to which voting instructions were not received from its customers, and
such shares were voted in proportion to the votes actually received from
beneficial owners by Waterhouse Securities. Accordingly, there were no broker
non-votes (proxies sent in by brokers and other nominees which cannot be voted
because instructions have not been received from the beneficial owners).
NOTE 5 - FEDERAL TAX INFORMATION (UNAUDITED)
In accordance with the Federal requirements, the Municipal Portfolio designates
substantially all the dividends paid from net investment income during the
fiscal year ended October 31, 1996 as "exempt-interest dividends." As required
by Federal regulations, shareholders will receive notification of their portion
of the Fund's taxable ordinary dividends and capital gains distributions paid
(if any) for the 1996 calendar year early in 1997.
<PAGE>
11
WATERHOUSE INVESTORS CASH MANAGEMENT FUND, INC.
MONEY MARKET PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE OBLIGATONS:
ASSET-BACKED COMMERCIAL PAPER -- 11.3%
$ 5,000,000 Corporate Asset Funding Company, Inc., due 11/15/96 5.27 $ 4,989,792
5,000,000 Corporate Receivables Corp., due 11/20/96 5.37 4,986,014
15,000,000 Corporate Receivables Corp., due 2/11/97 5.54 14,770,925
10,000,000 CXC, Inc., due 11/1/96 5.42 10,000,000
15,000,000 CXC, Inc., due 11/18/96 5.30 14,962,671
10,000,000 CXC, Inc., due 12/18/96 5.39 9,931,458
10,000,000 CXC, Inc., due 1/21/97 5.39 9,880,525
5,000,000 Eureka Securitization, Inc., due 11/13/96 5.29 4,991,233
10,000,000 Eureka Securitization, Inc., due 11/18/96 5.40 9,974,878
10,000,000 Eureka Securitization, Inc., due 11/21/96 5.28 9,970,778
15,000,000 Eureka Securitization, Inc., due 12/3/96 5.42 14,928,400
5,000,000 McKenna Triangle National Corp., due 1/15/97 5.38 4,944,583
12,000,000 Preferred Receivables Funding Corp., due 1/8/97 5.50 11,877,147
8,175,000 Preferred Receivables Funding Corp., due 1/9/97 5.53 8,089,605
10,150,000 Preferred Receivables Funding Corp., due 1/21/97 5.39 10,028,505
7,250,000 Preferred Receivables Funding Corp., due 1/27/97 5.40 7,156,789
------------
151,483,303
------------
BROKER/DEALER OBLIGATIONS -- 10.0%
5,000,000 Bear Stearns Cos., Inc. Variable Rate Notes, 5.53%, due 11/5/96 (Note A) 5.52 5,000,469
20,000,000 Bear Stearns Cos., Inc. Variable Rate Notes, 5.58%, due 11/5/96 (Note A) 5.56 20,003,511
20,000,000 Goldman Sachs Group, L.P. Variable Rate Note, 5.375%, due 11/27/96 (Note A,B) 5.38 20,000,000
10,000,000 Goldman Sachs Group, L.P., 11/27/96 5.30 9,962,011
5,000,000 Merrill Lynch & Co., Inc. Variable Rate Notes, 5.51%, due 11/5/96 (Note A) 5.51 5,000,000
40,000,000 Merrill Lynch & Co., Inc. Variable Rate Notes, 5.52%, due 11/5/96 (Note A) 5.52 40,000,000
10,000,000 Morgan Stanley Group, Inc. Variable Rate Notes, 5.83%, due 12/18/96 (Note A) 5.58 10,008,586
10,000,000 Morgan Stanley Group, Inc., due 11/14/96 5.48 9,980,897
15,000,000 Morgan Stanley Group, Inc., due 1/17/97 5.39 14,829,317
------------
134,784,791
------------
FINANCE & INSURANCE CO. OBLIGATIONS -- 15.0%
10,000,000 American Express Credit Corp., due 12/3/96 5.37 9,952,978
30,000,000 CIT Group Holdings, Inc. Variable Rate Notes, 5.43%, due 11/5/96 (Note A) 5.48 29,992,331
10,000,000 CIT Group Holdings, Inc., 7.125%, due 11/15/96 5.65 10,004,740
10,500,000 Ford Motor Credit Corp. Variable Rate Notes, 5.46%, due 11/5/96 (Note A) 5.46 10,500,000
5,000,000 Ford Motor Credit Corp. Variable Rate Notes, 5.48%, due 11/5/96 (Note A) 5.45 5,000,724
2,000,000 Ford Motor Credit Corp. Variable Rate Notes, 5.61%, due 11/5/96 (Note A) 5.45 2,000,609
10,000,000 Ford Motor Credit Corp. Variable Rate Notes, 5.65%, due 11/18/96 (Note A) 5.47 10,004,398
12,500,000 Ford Motor Credit Corp., due 11/6/96 5.62 12,490,417
20,000,000 General Motors Acceptance Corp. Variable Rate Notes. 5.48%, due 11/1/96 (Note A) 5.48 20,000,000
7,500,000 General Motors Acceptance Corp., due 1/13/97 5.53 7,417,875
14,000,000 General Motors Acceptance Corp., due 1/21/97 5.56 13,828,955
25,000,000 Household International, Inc., due 11/15/96 5.31 24,948,569
10,000,000 International Lease Finance Corp., due 4/3/97 5.62 9,767,950
20,000,000 Panasonic Finance, Inc., due 11/8/96 5.37 19,979,389
6,000,000 Toyota Motor Credit Corp. Variable Rate Notes, 5.43%, due 11/5/96 (Note A) 5.51 5,997,029
10,000,000 Toyota Motor Credit Corp., due 12/16/96 5.40 9,933,375
------------
201,819,339
------------
TOTAL CORPORATE OBLIGATIONS -- 36.3% 488,087,433
------------
</TABLE>
<PAGE>
12
WATERHOUSE INVESTORS CASH MANAGEMENT FUND, INC.
MONEY MARKET PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BANK OBLIGATIONS:
BANKERS' ACCEPTANCES -- 3.0%
$ 3,000,000 American Express Centurion Bank, due 1/27/97 5.76 $ 2,959,400
12,000,000 Chase Manhattan Bank, N.A., due 12/23/96 5.30 11,909,000
5,000,000 Chase Manhattan Bank, N.A., due 2/3/97 5.76 4,930,153
6,163,881 European American Bank, due 12/24/96 5.32 6,115,967
1,346,178 European American Bank, due 1/13/97 5.38 1,331,655
2,000,000 Mellon Bank, N.A., due 1/17/97 5.70 1,976,258
4,572,673 State Street Bank & Trust Co., due 12/2/96 5.33 4,551,883
4,018,117 Sun Trust Bank (Atlanta), due 11/22/96 5.27 4,005,811
2,533,542 Sun Trust Bank (Atlanta), due 11/29/96 5.32 2,523,137
------------
40,303,264
------------
BANK COMMERCIAL PAPER -- 2.1%
6,984,000 Kredietbank, N.V., due 1/6/97 5.42 6,915,499
10,000,000 Republic New York Corp., due 11/27/96 5.27 9,962,083
11,000,000 Svenska Handelsbanken NY, due 11/22/96 5.40 10,965,671
----------
27,843,253
----------
BANK NOTES -- 10.7%
12,000,000 American Express Centurion Bank Variable Rate Notes, 5.34%,
due 11/25/96 (Note A) 5.34 12,009,884
10,000,000 Bank of New York, 5.63%, due 3/3/97 5.49 10,003,449
6,000,000 Bankers Trust Co., NY, 7.25%, due 11/1/96 5.25 6,000,000
15,000,000 Bankers Trust Co., NY Variable Rate Notes, 5.48%, due 11/5/96 (Note A) 5.48 15,000,000
40,000,000 Colorado National Bank Variable Rate Notes, 5.33%, due 11/20/96 (Note A) 5.35 39,997,564
15,000,000 Comerica Bank, N.A. Variable Rate Notes, 5.48%, due 11/5/96 (Note A) 5.46 15,001,468
16,000,000 Comerica Bank, N.A. Variable Rate Notes, 5.48%, due 11/5/96 (Note A) 5.44 16,003,128
10,000,000 First National Bank of Boston, 5.28%, due 11/15/96 5.28 10,000,000
10,000,000 First National Bank of Boston, 5.41%, due 1/10/97 5.41 10,000,000
10,000,000 Household Bank, FSB, 5.29%, due 11/4/96 5.29 10,000,000
------------
144,015,493
------------
BANK SUPPORTED COMMERCIAL PAPER -- 11.6%
20,000,000 Banco de Colombia, due 1/16/97 (LOC: Barclays Bank) 5.43 19,774,111
15,000,000 Banco de Colombia, due 1/24/97 (LOC: Barclays Bank) 5.44 14,812,400
5,000,000 Banco Nacional de Mexico, due 11/8/96 (LOC: Barclays Bank) 5.47 4,994,731
3,640,000 Benedictine Long-Term Care, due 1/13/97 (LOC: LaSalle National Bank) 5.55 3,599,625
20,000,000 Comision Federal de Electricidad, due 11/5/96 (LOC: Westdeutsche Landesbank GZ) 5.32 19,988,222
19,750,000 MetroCrest Hosp. Auth., due 12/3/96 (LOC: Bank of New York) 5.66 19,652,036
14,000,000 Minmetals Capitals & Securities, Inc., due 4/3/97 (LOC: Credit Suisse) 5.53 13,679,890
30,000,000 Nacional Financiera, S.N.C., due 1/6/97 (LOC: Societe Generale) 5.40 29,706,850
10,000,000 NuFunding, Inc. VRDN, 5.475% (LOC: LaSalle National Bank) (Note C) 5.48 10,000,000
20,500,000 Unibanco-Uniao de Bancos Brasileiros, S.A., due 12/10/96
(LOC: Westdeutsche Landesbank GZ) 5.53 20,378,743
------------
156,586,608
------------
BANK TIME DEPOSITS -- 5.6%
15,000,000 American Express Centurion Bank, 5.29%, due 11/14/96 5.29 15,000,000
20,000,000 Banque Indosuez, 5.4375%, due 11/29/96 5.44 20,000,000
20,000,000 Banque Indosuez, 5.65%, due 11/12/96 5.65 20,000,000
20,000,000 Kredietbank, N.V., 5.32%, due 12/16/96 5.32 20,000,000
------------
75,000,000
------------
EURODOLLAR BANK CERTIFICATES OF DEPOSIT -- 2.4%
17,000,000 Abbey National, PLC, 5.66%, due 1/2/97 5.50 17,003,179
15,000,000 Banque Nationale de Paris, 5.55%, due 11/5/96 5.65 14,999,828
------------
32,003,007
------------
</TABLE>
<PAGE>
13
WATERHOUSE INVESTORS CASH MANAGEMENT FUND, INC.
MONEY MARKET PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
YANKEE BANK CERTIFICATES OF DEPOSIT -- 8.6%
$ 20,000,000 Bank of Nova Scotia, 5.52%, due 12/16/96 5.45 $ 20,001,686
20,000,000 Bankers Trust Co., NY Variable Rate Notes, 5.61%, due 11/5/96 (Note A) 5.58 20,002,276
20,000,000 Banque Nationale de Paris, 5.60%, due 4/25/97 5.60 20,000,941
5,000,000 Banque Nationale de Paris, 5.76%, due 2/3/97 5.74 5,000,254
15,000,000 Landesbank Hessen-Thueringen, GZ, 6.05%, due 6/13/97 5.69 15,026,703
20,000,000 National Westminster Bank, PLC, 5.51%, due 1/6/97 5.48 20,001,084
5,000,000 Societe Generale, 5.80%, due 4/15/97 5.62 5,000,840
10,000,000 Svenska Handelsbanken NY, 5.61%, due 4/4/97 5.60 10,000,416
--------------
115,034,200
--------------
TOTAL BANK OBLIGATIONS-- 44.0% 590,785,825
--------------
MUNICIPAL OBLIGATIONS:
TAXABLE OBLIGATIONS -- 2.6%
2,285,000 Berks Cty., PA, IDA, VRDN, 5.55% (LOC: CoreStates Bank,N.A.) (Note C) 5.50 2,285,000
19,000,000 Illinois Dev. Fin. Auth., Ser. 1996, VRDN, 5.55% (LOC: Northern Trust Co.)
(Note C) 5.55 19,000,000
13,500,000 State of Ohio, Taxable Dev. Assistance, Ser. 1996, 5.375%, Optional Put 12/1/96
(Insured: AMBAC; LIQ: Citibank, N.A.) 5.38 13,500,000
--------------
34,785,000
--------------
U.S. GOVERNMENT AND AGENCIES OBLIGATIONS:
U.S TREASURY BILLS -- 1.5%
20,000,000 U.S. Treasury Bills, due 2/6/97 5.10 19,738,908
--------------
FEDERAL FARM CREDIT BANK -- 0.7%
10,000,000 Discount Notes, due 1/27/97 4.95 9,885,692
--------------
FEDERAL HOME LOAN BANK -- 3.0%
40,000,000 Notes, 5.29%, due 3/5/97 5.23 39,998,630
--------------
FEDERAL NATIONAL MORTGAGE ASSOC. -- 5.0%
40,000,000 Variable Rate Notes, 5.46%, due 11/5/96 (Note A) 5.54 39,981,152
27,000,000 Variable Rate Notes, 5.36%, due 11/5/96 (Note A) 5.60 26,825,904
--------------
66,807,056
--------------
STUDENT LOAN MARKETING ASSOC. -- 3.6%
6,000,000 Variable Rate Notes, 5.53%, due 11/5/96 (Note A) 5.48 6,003,782
20,000,000 Variable Rate Notes, 5.37%, due 11/5/96 (Note A) 5.51 19,947,020
23,000,000 Variable Rate Notes, 5.38%, due 11/5/96 (Note A) 5.52 22,932,635
--------------
48,883,437
--------------
TOTAL U.S. GOVERNMENT AND AGENCIES OBLIGATIONS -- 13.8% 185,313,723
--------------
REPURCHASE AGREEMENTS -- 2.9%
38,620,000 Smith Barney Securities, Inc.
dated 10/31/96, due 11/1/96 in the amount of $38,625,965, fully collateralized
by $72,311,267 U.S. Government Securities, value $39,392,400 5.56 38,620,000
--------------
TOTAL INVESTMENTS -- 99.6% 1,337,591,981
OTHER ASSETS AND LIABILITIES, NET -- 0.4% 5,018,105
--------------
NET ASSETS -- 100.0% $1,342,610,086
==============
</TABLE>
Please see accompanying notes to the schedules
of investments and financial statements.
<PAGE>
14
WATERHOUSE INVESTORS CASH MANAGEMENT FUND, INC.
U.S. GOVERNMENT PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. TREASURY BILLS -- 1.0%
$ 3,700,000 U.S. Treasury Bills, due 2/6/97 5.10 $ 3,651,698
--------------
FEDERAL FARM CREDIT BANK -- 11.5%
2,320,000 Discount Notes, due 11/18/96 5.46 2,314,084
5,000,000 Discount Notes, due 11/27/96 5.21 4,981,258
4,500,000 Discount Notes, due 1/27/97 4.95 4,448,561
5,000,000 Discount Notes, due 3/3/97 5.42 4,910,194
10,000,000 Variable Rate Notes, 5.36%, due 11/1/96 (Note A) 5.39 9,998,075
6,000,000 Variable Rate Notes, 5.52%, due 11/1/96 (Note A) 5.50 6,001,200
10,000,000 Variable Rate Notes, 5.34%, due 1/1/97 (Note A) 5.56 9,998,229
--------------
42,651,601
--------------
FEDERAL HOME LOAN BANK -- 15.1%
5,000,000 Discount Notes, due 12/6/96 5.45 4,974,236
7,500,000 Discount Notes, due 1/23/97 5.30 7,409,738
5,000,000 Discount Notes, due 1/27/97 5.34 4,936,683
5,000,000 Discount Notes, due 1/27/97 5.38 4,936,683
10,000,000 Discount Notes, due 2/10/97 5.39 9,852,708
10,000,000 Discount Notes, due 2/24/97 5.33 9,833,090
4,000,000 Discount Notes, due 4/14/97 5.53 3,902,876
10,000,000 Notes, 5.29%, due 3/5/97 5.23 9,999,657
--------------
55,845,671
--------------
FEDERAL HOME LOAN MORTGAGE CORP. -- 13.3%
5,000,000 Discount Notes, due 11/4/96 5.33 4,997,808
5,000,000 Discount Notes, due 11/6/96 5.29 4,996,375
5,000,000 Discount Notes, due 12/3/96 5.34 4,976,578
5,000,000 Discount Notes, due 12/11/96 5.42 4,970,278
10,000,000 Discount Notes, due 1/3/97 5.31 9,908,475
5,000,000 Discount Notes, due 2/21/97 5.32 4,918,644
10,000,000 Discount Notes, due 3/3/97 5.30 9,823,778
5,000,000 Discount Notes, due 4/1/97 5.46 4,888,638
--------------
49,480,574
--------------
FEDERAL NATIONAL MORTGAGE ASSOC. -- 29.2%
7,250,000 Discount Notes, due 11/7/96 5.30 7,243,644
10,500,000 Discount Notes, due 11/14/96 5.30 10,480,075
10,000,000 Discount Notes, due 1/17/97 5.31 9,888,029
7,500,000 Discount Notes, due 1/22/97 5.30 7,410,825
8,030,000 Discount Notes, due 2/7/97 5.38 7,915,238
5,000,000 Discount Notes, due 2/21/97 5.31 4,918,800
3,280,000 Discount Notes, due 2/26/97 5.53 3,222,436
5,000,000 Discount Notes, due 3/17/97 5.43 4,900,078
9,735,000 Discount Notes, due 4/28/97 5.35 9,484,221
8,000,000 Variable Rate Notes, 5.36%, due 11/5/96 (Note A) 5.59 7,953,436
10,000,000 Variable Rate Notes, 5.36%, due 11/5/96 (Note A) 5.60 9,935,520
10,000,000 Variable Rate Notes, 5.46%, due 11/5/96 (Note A) 5.54 9,995,288
10,000,000 Variable Rate Notes, 5.41%, due 12/2/96 (Note A) 5.43 9,996,888
5,000,000 Variable Rate Notes, 5.46%, due 12/20/96 (Note A) 5.56 4,996,875
--------------
108,341,353
--------------
</TABLE>
<PAGE>
15
WATERHOUSE INVESTORS CASH MANAGEMENT FUND, INC.
U.S. GOVERNMENT PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
STUDENT LOAN MARKETING ASSOC. -- 17.6%
$ 5,000,000 Variable Rate Notes, 5.58%, due 11/1/96 (Note A) 5.33 $ 5,000,000
25,500,000 Variable Rate Notes, 5.37%, due 11/5/96 (Note A) 5.51 25,432,450
10,000,000 Variable Rate Notes, 5.38%, due 11/5/96 (Note A) 5.52 9,970,711
14,630,000 Variable Rate Notes, 5.39%, due 11/5/96 (Note A) 5.33 14,630,861
7,700,000 Variable Rate Notes, 5.42%, due 11/5/96 (Note A) 5.44 7,698,827
2,750,000 Variable Rate Notes, 5.53%, due 11/5/96 (Note A) 5.48 2,751,566
--------------
65,484,415
--------------
REPURCHASE AGREEMENTS -- 12.1%
18,000,000 Morgan Stanley,
dated 10/31/96, due 11/1/96 in the amount of $18,002,785, fully collateralized
by $28,463,267 U.S. Government Securities, value $18,512,223 5.57 18,000,000
18,000,000 Prudential Securities,
dated 10/31/96, due 11/1/96 in the amount of $18,002,780, fully collateralized
by $18,066,000 U.S. Government Securities, value $18,363,197 5.56 18,000,000
8,979,000 Smith Barney Securities, Inc.,
dated 10/31/96, due 11/1/96 in the amount of $8,980,387, fully collateralized
by $9,280,088 U.S. Government Securities, value $9,158,580 5.56 8,979,000
--------------
44,979,000
--------------
TOTAL INVESTMENTS -- 99.8% 370,434,312
OTHER ASSETS AND LIABILITIES, NET -- 0.2% 612,458
--------------
NET ASSETS -- 100.0% $ 371,046,770
==============
</TABLE>
Please see accompanying notes to the schedules
of investments and financial statements.
<PAGE>
16
WATERHOUSE INVESTORS CASH MANAGEMENT FUND, INC.
MUNICIPAL PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL OBLIGATIONS:
ALABAMA -- 0.2%
$ 500,000 Decatur Ind. Dev. Board (Amoco Chemical Co.) Ser. 1995 VRDN,
3.70% (Note C) 3.70 $ 500,000
--------------
ALASKA -- 3.5%
1,000,000 Valdez Marine Term. (ARCO Transp. Alaska, Inc. Proj.) Ser. 1994A, 3.30%,
due 11/1/96 3.30 1,000,000
2,600,000 Valdez Marine Term. (ARCO Transp. Alaska, Inc. Proj.) Ser. 1994A, 3.50%,
due 11/6/96 3.50 2,600,000
4,300,000 Valdez Marine Term. (ARCO Transp. Alaska, Inc. Proj.) Ser. 1994A, 3.55%,
due 11/21/96 3.65 4,299,441
--------------
7,899,441
--------------
ARKANSAS -- 2.3%
5,100,000 Pulaski Cty. (Chenel Park Apts. Proj.) VRDN, 3.85%
(LOC: PNC Bank) (Note C) 3.85 5,100,000
--------------
CALIFORNIA -- 1.5%
300,000 California Alternative Energy Source Fin. Auth., Ser. 1986 VRDN,
3.75% (LOC: Banque Nationale de Paris) (Note C) 3.75 300,000
3,000,000 California School Cash Reserve Notes, Ser. A, 4.75%, due 7/2/97 3.85 3,017,304
100,000 San Dimas Redev. Agy. (Community Dev.) Ser. 1983 VRDN,
3.65% (LOC: BankAmerica) (Note C) 3.65 100,000
--------------
3,417,304
--------------
COLORADO -- 3.1%
300,000 Adams Cty. Ind. Dev. Rev. (City View Park Partners) Ser. 1985 VRDN,
3.60% (LOC: Barclays Bank) (Note C) 3.60 300,000
6,800,000 Pueblo Cty. Ind. Dev. Rev. (Kaiser Aero Space & Elec. Proj.)
VRDN, 3.70% (LOC: ABN-AMRO Bank) (Note C) 3.70 6,800,000
--------------
7,100,000
--------------
DISTRICT OF COLUMBIA -- 0.1%
250,000 Washington D.C. G.O. Bonds, 7.00%, due 6/1/97 (Insured: AMBAC) 4.10 254,100
--------------
FLORIDA -- 8.0%
100,000 Clearwater Water & Sewer Rev. Bonds Ser. A, 7.10%, due 12/1/96,
Prerefunded @ 102 (Note D) 3.85 102,253
340,000 Dade Cty. Seaport Rev., 6.625%, due 10/1/97, Prerefunded @ 100 (Note D) 4.25 347,146
100,000 Florida Board of Educ. G.O., Ser. C, 5.75%, due 5/1/97 (Escrow to Maturity) 4.22 100,736
160,000 Florida HFA (Carlton Arms II Proj.) Ser. EEE, VRDN, 3.60%
(LOC: Kredietbank) (Note C) 3.60 160,000
100,000 Florida HFA, 5.50%, due 11/1/96, Prerefunded @ 100 (Note D) 3.75 100,000
3,000,000 Indian River Cty. Hosp. Dist., Ser. 1990, 3.50%, due 11/18/96
(LOC: Kredietbank) 3.50 3,000,000
1,000,000 Jacksonville Elec. Auth. Tax Exempt CP Notes, 3.65%, due 12/17/96
(SBPA: Morgan Guaranty Trust Co.) 3.65 1,000,000
8,500,000 Lee Cty. Hosp. Board of Dir. (Lee Memorial Hosp. Proj.) Ser. 1995A,
3.80%, due 12/10/96 (LINE: Sun Bank) 3.80 8,500,000
175,000 Northern Palm Beach Cty. (Water Control Unit #11), 4.00%, due 8/1/97
(Insured: MBIA) 4.08 174,878
700,000 Orange Cty. CP Notes, Ser. A, 3.65%, due 12/11/96 (LINE: Nationsbank Corp.) 3.65 700,000
1,000,000 Orange Cty. CP Notes, Ser. A, 3.55%, due 12/11/96 (LINE: Nationsbank Corp.) 3.55 1,000,000
3,000,000 Sunshine St. Gov. Fin. Comm. (Govt. Fin. Prog.) Rev. CP Notes,
3.65%, due 12/6/96 3.65 3,000,000
--------------
18,185,013
</TABLE>
<PAGE>
17
WATERHOUSE INVESTORS CASH MANAGEMENT FUND, INC.
MUNICIPAL PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
GEORGIA -- 3.1%
$ 7,000,000 Municipal Elec. Auth. of Georgia (Proj. #1) Ser. 1985B, 3.50%,
due 11/22/96 (LOC: Credit Suisse, Morgan Guaranty Trust Co., & Bayerische
Landesbank) 3.50 $ 7,000,000
--------------
HAWAII -- 1.5%
3,450,000 Honolulu City & Cty., Tax Exempt CP, 3.50%, due 11/14/96
(LINE: Canadian Imperial Bank of Commerce) 3.50 3,450,000
--------------
ILLINOIS -- 16.6%
2,500,000 Arcola IDR (Herff Jones, Inc. Proj.) VRDN, 3.60% (LOC: Wachovia
Bank) (Note C) 3.60 2,500,000
2,900,000 Chicago (Muni. Sec. Trust Receipts) Ser. A2 VRDN, 3.80%
(Insured: AMBAC; LIQ: Credit Suisse) (Note C) 3.80 2,900,000
7,000,000 Chicago O'Hare Intl. Airport (Northwest Airlines) Ser. A VRDN,
3.90% (LOC: Bank of Tokyo-Mitsubishi) (Note C) 3.90 7,000,000
100,000 Cook Cty. G.O. Bonds, 3.80%, due 11/15/96 (Insured: MBIA) 3.65 100,005
50,000 Cook Cty. G.O. Bonds, 6.75%, due 11/1/96 (Insured: MBIA) 3.65 50,000
375,000 Illinois Dev. Fin. Auth. (D.E. Akin Seed Proj.) VRDN, 4.05%
(LOC: Banc One) (Note C) 4.05 375,000
100,000 Illinois Dev. Fin. Auth. (Tempco Elec. Proj.) Ser. 1988C VRDN,
3.75% (LOC: ABN-AMRO Bank) (Note C) 3.75 100,000
4,000,000 Illinois Hlth. Fac. Auth. Rev. (Rush-Presbyterian-St. Lukes Med. Ctr.)
Ser. 1989A, 3.65%, due 12/12/96 (LINE: Northern Trust Co.) 3.65 4,000,000
7,360,000 Illinois Hsg. Dev. Auth. (Homeowner Mtg. Rev.) Ser. 1995E2,
3.75%, Mandatory Put 12/31/96 (GIC: Morgan Stanley & Co.,Inc.) 3.75 7,360,000
7,000,000 Illinois Student Assistance (Community Student Loan)
Ser. A VRDN, 3.70% (LOC: Bank of America) (Note C) 3.70 7,000,000
1,900,000 North Aurora IDR (Oberweiss Dairy, Inc. Proj.) VRDN, 3.80%
(LOC: LaSalle National Bank) (Note C) 3.80 1,900,000
2,600,000 Oak Lawn IDR (Lavergne Partners Proj.) VRDN, 3.80%
(LOC: LaSalle National Bank) (Note C) 3.80 2,600,000
300,000 Southwestern IL Dev. Auth. Solid Waste Disp. (Shell Oil Co. Wood River Proj.)
Ser. 1992 VRDN, 3.70% (Note C) 3.70 300,000
1,200,000 Southwestern IL Dev. Auth. Solid Waste Disp. (Shell Oil Co. Wood River Proj.)
Ser. 1995 VRDN, 3.70% (Note C) 3.70 1,200,000
--------------
37,385,005
--------------
INDIANA -- 3.2%
10,000 Auburn (R.J. Tower Corp. Proj.) Ser. 1988 VRDN, 3.90%
(LOC: Comerica Bank) (Note C) 3.90 10,000
2,235,000 Indiana Hlth. Fac. Fin. Auth. (Community Health & Rehab.)
VRDN, 3.90% (LOC: Marine Midland Bank) (Note C) 3.90 2,235,000
3,000,000 Newton Cty. IDR (Intec Group, Inc. Proj.) VRDN, 3.80%
(LOC: LaSalle National Bank) (Note C) 3.80 3,000,000
2,000,000 Sullivan Natl. Rural Util. Coop. Fin. Corp.
(Hoosier Energy Rural Elec. Coop., Inc.) Ser. 1985L6, 3.65%, due 12/11/96 3.65 2,000,000
--------------
7,245,000
--------------
IOWA -- 2.1%
100,000 Dubuque IDA (Swiss Valley Farms Co.) Ser. 1987 VRDN, 3.90%
(LOC: Rabobank Nederland) (Note C) 3.90 100,000
4,750,000 Dubuque (Jeld-Wen, Inc. Proj.) Ser. 1988 VRDN, 4.00%
(LOC: ABN-AMRO Bank) (Note C) 4.00 4,750,000
--------------
4,850,000
--------------
</TABLE>
<PAGE>
18
WATERHOUSE INVESTORS CASH MANAGEMENT FUND, INC.
MUNICIPAL PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
KANSAS -- 0.8%
$ 1,200,000 Burlington PCR (Kansas City Power & Light) Ser. 1985B,
3.65%, due 12/5/96 (LOC: Societe Generale) 3.65 $ 1,200,000
700,000 Butler Cty. Solid Waste Disp. (Texaco Refining & Marketing)
Ser. B VRDN, 3.75% (Note C) 3.75 700,000
--------------
1,900,000
--------------
KENTUCKY -- 3.9%
200,000 Boone Cty. (Cincinnati Gas & Elec. Co.) Ser. 1985A VRDN, 3.75%
(LOC: Union Bank of Switzerland) (Note C) 3.75 200,000
800,000 Daviess Cty. (Scott Paper, Kimberly Clark) Ser. B VRDN, 3.80% (Note C) 3.80 800,000
1,200,000 Mayfield (Kentucky League of Cities Pooled Lease Fin. Prog.) Ser. 1996 VRDN,
3.75% (LOC: PNC Bank) (Note C) 3.75 1,200,000
1,000,000 Pendleton Cty. (Kentucky Assoc. of Counties Lease Trust Prog.) Ser. 1989, 3.45%,
due 11/12/96 (LOC: Commonwealth Bank of Australia) 3.45 1,000,000
2,000,000 Pendleton Cty. (Kentucky Assoc. of Counties Lease Trust Prog.) Ser. 1989, 3.70%,
due 11/12/96 (LOC: Commonwealth Bank of Australia) 3.70 2,000,000
3,500,000 Pulaski Cty. Solid Waste Disp. (National Rural CFC, Eastern Kentucky) Ser. B,
3.70%, Mandatory Put 2/15/97 3.70 3,500,000
100,000 Warsaw IDR (SDI Operating Partners) Ser. 1988 VRDN,
3.75% (LOC: Fifth Third Bank) (Note C) 3.75 100,000
--------------
8,800,000
--------------
LOUISIANA -- 0%
75,000 Louisiana G.O., 8.00%, due 5/1/97, Prerefunded @ 102 (Insured: MBIA) (Note D) 4.10 77,876
--------------
MAINE -- 0.5%
1,060,000 Maine Municipal Bond Bank Rev., 5.80%, due 11/1/96 (Insured: MBIA) 3.60 1,060,000
--------------
MARYLAND -- 1.3%
3,000,000 Maryland Community Dev. Auth. Ser. 1996, 4.00%, Mandatory Put 9/1/97 4.00 3,000,000
--------------
MICHIGAN -- 4.9%
7,900,000 Greater Detroit Resources Recovery Auth., 4.50%, due 12/13/96 3.75 7,906,498
75,000 Lakewood Public Schools, 5.20%, due 5/1/97 (Insured: MBIA) 4.05 75,390
3,000,000 Wayne Cty. (Detroit Airport) Ser. 1996B, 3.65%, Opt. Put 12/2/96
(LOC: Bayerische Landesbank) 3.65 3,000,000
--------------
10,981,888
--------------
MONTANA -- 2.7%
6,000,000 Montana Board of Investments (Payroll Tax, Workman's Comp.)
VRDN, 3.60% (Note C) 3.60 6,000,000
--------------
NEBRASKA -- 1.8%
4,000,000 Lincoln (Lincoln Elec. Sys.) Ser. 1995, 3.40%, due 11/18/96
(LIQ: Morgan Guaranty Trust Co.) 3.40 4,000,000
--------------
NEVADA -- 2.1%
4,500,000 Clark Cty. (Nevada Cogeneration Assoc. #2) Ser. 1992 VRDN, 3.70%
(LOC: ABN-AMRO Bank) (Note C) 3.70 4,500,000
300,000 Director of the State of Nevada IDR (Pilot Co. Proj.) Ser. 1991A VRDN,
3.70% (LOC: Wells Fargo) (Note C) 3.70 300,000
--------------
4,800,000
--------------
NEW HAMPSHIRE -- 0%
100,000 New Hampshire Bus. Fin. Auth. PCR (Public Service of New Hampshire)
Ser. 1992D VRDN, 3.65% (LOC: Barclays Bank) (Note C) 3.65 100,000
--------------
</TABLE>
<PAGE>
19
WATERHOUSE INVESTORS CASH MANAGEMENT FUND, INC.
MUNICIPAL PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
NEW JERSEY -- 5.7%
$ 1,200,000 Bayonne G.O. Bond Anticipation Notes, 4.25%, due 12/15/96 3.70 $ 1,200,786
1,848,000 Camden G.O. Bond Anticipation Notes, 4.875%, due 3/13/97 4.25 1,852,111
5,000,000 East Orange Water & Sewer G.O. Bond Anticipation Notes, 4.75%, due 8/28/97 4.25 5,019,685
4,782,000 Paterson G.O. Bond Anticipation Notes, 4.25%, due 5/22/97 3.90 4,790,806
--------------
12,863,388
--------------
NEW YORK -- 0.3%
500,000 New York Dorm. Auth. (Spec. Obl. - State Univ. Educ. Fac.)
Ser. A, 6.40%, due 11/1/96 4.00 500,000
125,000 New York Med. Care Fac. (Hosp. & Nursing Home), 4.75%,
due 8/15/97 (Insured: FHA) 4.00 125,715
--------------
625,715
--------------
NORTH CAROLINA -- 3.4%
2,800,000 North Carolina Muni. Power Agy. (Catawba Proj. #1), 3.65%,
due 12/17/96 (LOC: Union Bank of Switzerland & Morgan Guaranty Trust Co.) 3.65 2,800,000
5,000,000 North Carolina Muni. Power Agy. (Catawba Proj. #1), 3.60%,
due 12/19/96 (LOC: Union Bank of Switzerland & Morgan Guaranty Trust Co.) 3.60 5,000,000
--------------
7,800,000
--------------
OHIO -- 0.1%
300,000 Ohio Highway G.O., 5.00%, due 5/15/97 3.80 301,870
--------------
PENNSYLVANIA -- 5.3%
2,100,000 Allegheny Cty. (Presbyterian Hosp.) Ser. A, 6.80%, due 3/1/97 (Insured: MBIA) 3.75 2,120,671
5,000,000 Carbon Cty. IDA Res. Rec. Rev. (Panther Creek Proj.) Ser. 1990A,
3.60%, due 12/16/96 (LOC: National Westminster Bank) 3.60 5,000,000
2,000,000 Delaware Cty. PA PCR Ser. 1988A, 3.70%, due 12/9/96
(Insured: FGIC; LIQ: FGIC) 3.70 2,000,000
1,700,000 Delaware Cty. PA PCR Ser. 1988A, 3.50%, due 12/9/96
(Insured: FGIC; LIQ: FGIC) 3.50 1,700,000
140,000 Pennsylvania G.O. Ser. A, 6.50%, due 6/1/97 4.10 141,898
700,000 Pennsylvania Turnpike Comm. Ser. A, 7.875%, due 12/1/96,
Prerefunded @ 102 (Note D) 3.65 716,272
200,000 Venango IDA (Penzoil Proj.) Ser. 1982A VRDN, 3.95%
(LOC: Mellon Bank) (Notes C) 3.95 200,000
--------------
11,878,841
--------------
PUERTO RICO -- 0.4%
1,000,000 Puerto Rico Gov't. Dev. Bank, 3.65%, due 12/5/96 3.65 1,000,000
--------------
SOUTH CAROLINA -- 4.1%
6,700,000 South Carolina Jobs EDA (Zeuna Starker USA, Inc. Proj.)
VRDN, 3.90% (LOC: Bayerische Landesbank) (Note C) 3.90 6,700,000
2,500,000 South Carolina Public Service Auth., 3.55%, due 11/8/96 (RCA: Nationsbank Corp.) 3.55 2,500,000
100,000 Sumter Cty. Hosp. Rev. (Tuomey Regional Med. Ctr.), 6.00%,
due 11/15/96 (Insured: MBIA) 3.70 100,085
--------------
9,300,085
--------------
TENNESSEE -- 0.8%
1,700,000 Memphis-Shelby Cty. Airport Auth. CP Notes, 3.60%, due 12/3/96
(LOC: Canadian Imperial Bank of Commerce) 3.60 1,700,000
--------------
</TABLE>
<PAGE>
20
WATERHOUSE INVESTORS CASH MANAGEMENT FUND, INC.
MUNICIPAL PORTFOLIO o SCHEDULE OF INVESTMENTS
October 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL ANNUALIZED
AMOUNT YIELD (%) VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
TEXAS -- 8.9%
$ 3,500,000 Austin Comb. Util. Sys. (Travis & Williamson Ctys.) Ser. A, 3.55%,
due 12/9/96 (LOC: Swiss Bank) 3.55 $ 3,500,000
200,000 Brazos River Auth. PCR (Texas Util. Elec. Co. Proj.) Ser. 1995C VRDN,
3.70% (LOC: Swiss Bank) (Note C) 3.70 200,000
600,000 Brazos River Auth. PCR (Texas Util. Elec. Co. Proj.) Ser. 1996C VRDN,
3.70% (Insured: AMBAC, SBPA, Bank of New York) (Note C) 3.70 600,000
1,470,000 Brazos River Auth. PCR (Texas Util. Elec. Co. Proj.) Ser. 1994A,
3.50%, due 12/5/96 (LOC: Canadian Imperial Bank of Commerce) 3.50 1,470,000
200,000 Gulf Coast IDA Marine Term. Rev. (Amoco Oil Co.) Ser. 1993 VRDN,
3.70% (Note C) 3.70 200,000
3,500,000 Harris Cty. Health Fac. Dev. Corp. (Memorial Hosp. Sys. Proj.), 3.65%,
due 1/14/97 (LOC: Societe Generale) 3.65 3,500,000
4,200,000 Houston Airport CP Notes Ser. A, 3.55%, due 11/26/96
(LOC: Comerzbank & Canadian Imperial Bank of Commerce) 3.55 4,200,000
100,000 Houston Water & Sewer Ser. A, 7.00%, due 12/1/96, Prerefunded @ 102 (Note D) 3.75 102,254
1,720,000 Texas Dept. of Hsg. & Comm. Affairs SFM Rev. Ref. CP Notes Ser. A,
3.65%, due 12/19/96 (Insured: FGIC; LIQ: FGIC) 3.65 1,720,000
4,500,000 Texas G.O. Tax Rev. Anticipation Notes, 4.75%, due 8/29/97 3.91 4,529,992
--------------
20,022,246
--------------
UTAH -- 3.4%
2,700,000 Utah Board of Regents Stud. Loan Ser. A, 7.125%,
due 11/1/96 (Insured: AMBAC) 3.60 2,700,000
800,000 Tooele Cty. Hazardous Waste Treatment Rev. (Rollins Envir. Svc. Inc., Proj.)
Ser. A, 3.65%, due 11/13/96 (LOC: Union Bank of Switzerland) 3.65 800,000
500,000 Tooele Cty. Hazardous Waste Treatment Rev. (Rollins Envir. Svc. Inc., Proj.)
Ser. A, 3.60%, due 11/13/96 (LOC: Union Bank of Switzerland) 3.60 500,000
3,000,000 Tooele Cty. Hazardous Waste Treatment Rev. (Rollins Envir. Svc. Inc., Proj.)
Ser. A, 3.55%, due 11/13/96 (LOC: Union Bank of Switzerland) 3.55 3,000,000
700,000 Ogden City G.O., 4.00%, due 12/15/96 (Insured: MBIA) 3.70 700,212
--------------
7,700,212
--------------
VIRGINIA -- 0.5%
800,000 King George Cty. IDA (Birchwood Power Proj.) Ser. 1996 VRDN,
3.70% (LOC: Credit Suisse) (Note C) 3.70 800,000
350,000 Fairfax Cty. Ser. B, 6.40%, due 11/1/96, Prerefunded @ 100.50 (Note D) 3.50 351,750
--------------
1,151,750
--------------
WEST VIRGINIA -- 3.5%
4,500,000 West Virginia Public Energy Auth. (Morgantown Energy Assoc. Proj.)
Ser. 1989A, 3.45%, due 11/21/96 (LOC: Swiss Bank) 3.45 4,500,000
3,500,000 West Virginia Public Energy Auth. (Morgantown Energy Assoc. Proj.)
Ser. 1989A, 3.50%, due 12/4/96 (LOC: Swiss Bank) 3.50 3,500,000
--------------
8,000,000
--------------
TOTAL MUNICIPAL OBLIGATIONS -- 99.6% 225,449,734
OTHER ASSETS AND LIABILITIES, NET -- 0.4% (803,660)
--------------
NET ASSETS-- 100.0% $ 226,253,394
==============
</TABLE>
Please see accompanying notes to the schedules of
investments and financial statements.
<PAGE>
21
WATERHOUSE INVESTORS CASH MANAGEMENT FUND, INC.
NOTES TO SCHEDULES OF INVESTMENTS
October 31, 1996
(A) Variable rate securities. The rates shown are the current rates on October
31, 1996. Dates shown represent the next interest reset date.
(B) This note was aquired for investment, not with intent to distribute or
sell. The security is restricted as to public resale. The security was
acquired on March 26, 1996 at cost of par value. At October 31, 1996, the
aggregate value of this security is $20,000,000, representing approximately
.01% of net assets and is valued at amortized cost.
(C) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest
rates.
(D) Bonds which are prerefunded are collateralized by U.S. Government
Securities which are held in escrow and are used to pay principal and
interest on the municipal issue and to retire the bonds in full at the
earliest refunding date.
DESCRIPTION OF ABBREVIATIONS
AMBAC American Municipal Bond Assurance Corporation
CP Commercial Paper
EDA Economic Development Authority
FGIC Financial Guaranty Insurance Company
FHA Federal Housing Administration
GIC Guaranteed Investment Contract
GO General Obligation
HFA Housing Finance Authority
IDA Industrial Development Authority
IDR Industrial Development Revenue Bond
LINE Line of Credit
LIQ Liquidity Agreement
LOC Letter of Credit
MBIA Municipal Bond Investors Assurance Insurance
Corporation
PCR Pollution Control Revenue Bond
RCA Revolving Credit Agreement
SBPA Standby Bond Purchase Agreement
SFM Single Family Mortgage
VRDN Variable Rate Demand Note
<PAGE>
22
Report of Ernst & Young LLP, Independent Auditors
Shareholders and Board of Directors
Waterhouse Investors Cash Management Fund, Inc.
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of Waterhouse Investors Cash Management Fund, Inc.
(comprising, respectively, the Money Market Portfolio, the U.S. Government
Portfolio and the Municipal Portfolio) as of October 31, 1996, and the related
statements of operations and changes in net assets and financial highlights for
the period from December 20, 1995 (commencement of operations) to October 31,
1996. These financial statements and financial highlights are the responsibility
of the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of October 31, 1996 by
correspondence with the custodian and brokers. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective Portfolios constituting Waterhouse Investors Cash Management
Fund, Inc. at October 31, 1996, and the results of their operations, the changes
in their net assets and the financial highlights for the period from December
20, 1995 to October 31, 1996, in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
New York, New York
December 5, 1996
<PAGE>
23
WATERHOUSE INVESTORS CASH MANAGEMENT FUND, INC.
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS Executive Officers
George F. Staudter Theodore Rosen John E. Pelletier*
Chairman Director President
Richard W. Dalrymple Lawrence J. Toal Christopher J. Kelley*
Director Director Vice President and Secretary
Richard W. Ingram*
Vice President, Treasurer
and Chief Financial Officer
WATERHOUSE ASSET MANAGEMENT, INC.
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS
Kenneth C. Ebbitt
Chairman and Frank J. Petrilli
Chief Executive Officer President and
Chief Operating Officer
Dennis C. Borecki Waterhouse Investor Services, Inc.
President and
Chief Operating Officer Lawrence M. Waterhouse, Jr.
Chairman and
Richard H. Neiman Chief Executive Officer
Executive Vice President Waterhouse Investor Services, Inc.
General Counsel and Secretary
Waterhouse Investor Services, Inc.
Senior Officers
M. Bernard Siegel
Senior Vice President
Chief Financial Officer & Treasurer
David A. Hartman
Senior Vice President
Chief Investment Officer
Michele R. Teichner
Senior Vice President
Operations & Compliance
*Affiliated person of the Distributor
This Report has been prepared for shareholders and may be distributed to others
only if preceded or accompanied by a current prospectus.
<PAGE>
24
- --------------------------------------------------------------------------------
INVESTMENT MANAGER AND ADMINISTRATOR
Waterhouse Asset Management, Inc.
50 Main Street
White Plains, NY 10606
SHAREHOLDER SERVICING
Waterhouse Securities, Inc.
100 Wall Street
New York, NY 10005
Customer Service Department (800) 934-4410
TRANSFER AGENT
Waterhouse National Bank
One North Lexington Avenue
White Plains, NY 10601
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
DISTRIBUTOR
Funds Distributor Inc.
60 State Street
Boston, MA 02109
INDEPENDENT AUDITORS
Ernst & Young, LLP
787 Seventh Avenue
New York, NY 10019
LEGAL COUNSEL
Shereff, Friedman, Hoffman, and Goodman LLP
919 Third Avenue
New York, NY 10022
WATERHOUSE SECURITIES, INC.
---------------------------
Member New York Stock Exchange o SIPC
National Headquarters
100 Wall Street o New York, New York 10005
Customer Service o (800) 934-4410
- --------------------------------------------------------------------------------
